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In 2011, at 41-years-old, I retired early from my six-figure profession in legislation. My spouse joined me in retirement 4 years later after quitting her job as a nurse.
By the point she retired in 2015, our portfolio of high-yielding shares and mutual funds paid roughly $130,000 a 12 months in dividends, which coated most of our residing bills in Washington, D.C.
That 12 months, we took a household trip to Lisbon, Portugal with our daughter, who’s now 16 years outdated. We instantly fell in love with town.
That is when it hit us: Why not go away the U.S. and spend our retirement life in Lisbon?
With out losing any time, our household of three packed up our belongings and booked one-way tickets to Portugal. The plan was to hire out our home within the U.S., reduce our residing bills whereas residing in Lisbon, then reinvest these financial savings into extra dividend-paying shares to compound our passive revenue.
We have been residing right here for about six years now, and we’re nowhere close to prepared to depart. Here is how a lot we spend monthly — and why we love residing in Portugal:
1. Dwelling bills are a lot decrease than within the U.S.
Portugal is taken into account one of many most cost-effective nations to dwell in Western Europe.
On common, in comparison with life again within the U.S., we have reduce our bills by 50%. We’re lucky to personal our two-bedroom, one-bathroom, 1,300-square-foot condominium, which we bought in 2015 for a little bit over €500,000 with no mortgage.
Our favourite Portuguese cut price: A number of baggage of contemporary fruit and veggies. A heat loaf of bread from Gleba Bakery — made with its very personal homegrown heirloom wheat — prices solely $4, and is price each penny.
Certainly one of our greatest month-to-month bills is eating out at eating places. A typical lunch on the Mercado de Campo de Ourique, a gourmand meals market, can run about $16 per particular person. A glass of wine prices an additional $4.
Here is a breakdown of our month-to-month bills:
- Medical health insurance (for all the household): $258
- Groceries: $407
- Primary family necessities: $250
- Transportation (fuel, automotive insurance coverage, public transportation): $250
- Housing (property taxes, insurance coverage, upkeep): $430
- Water and electrical energy: $175
- Telephone and web: $80
- Consuming out (10 to 12 meals monthly): $600
Complete: $2,450
2. A really beneficiant tax system
European taxes are typically very excessive, however not like nations like France and Italy, Portugal does not impose wealth, inheritance or property taxes (though there’s a 10% “stamp obligation” on Portuguese property which can be inherited or gifted exterior of the direct household).
As an expat, you might be thought of a Portuguese taxpayer in case you reside greater than 183 days in a single calendar 12 months in Portugal or, topic to sure circumstances, when you have a everlasting residence accessible in your private use in Portugal.
And because of the non-habitual resident tax regime, foreigners can profit from a tax exemption (or a lowered tax price) on most international supply revenue for 10 years.
As U.S. residents, we’re all the time responsible for U.S. revenue taxes, however we save on state and native revenue taxes. Plus, our property tax invoice in Portugal is a fraction of what we paid within the U.S.
3. Low-cost, high-quality healthcare
Along with Portugal’s nationwide well being providers protection, which presents backed or free well being providers to all authorized residents of Portugal, my household’s non-public medical health insurance via Multicare is complete and reasonably priced.
Our premium is $258 monthly, however our plan has a $0 deductible and $16 co-pays for physician visits at a personal hospital. I as soon as had an in a single day emergency room go to that concerned a number of assessments and consultations; all the price was coated by our insurance coverage, and I paid nothing apart from my co-pay.
Prescription drug costs additionally are typically dramatically decrease in Portugal than within the U.S. One generic prescription that might sometimes price me $600 a month again house is barely $21 in Portugal — for the model title remedy.
4. Low crime charges
Portugal is the fourth most secure nation on the earth, in keeping with the 2021 International Peace Index, which considers terrorism, violent crime and political instability, amongst different components, in its methodology.
And the Portugal Information reported that 2020 had the bottom crime charges in Portugal because the nation began reporting its crime information in 1989.
Past the statistics, my household and I really feel very secure in each a part of Lisbon at nearly all hours. Locals even declare tables on the Mercado by leaving their purses unattended on a chair whereas they go meals buying.
Once we first moved right here, my spouse observed there is no such thing as a “cat calling,” and she or he has by no means felt harassed strolling down the road. The Portuguese are likely to prize good manners. “Bem educado” means “well mannered” in Portuguese, which comes as very excessive reward.
That stated, pickpocketing is a real menace in congested vacationer areas, so we’re all the time on guard after we journey the tram.
5. Constantly nice climate
Temperatures in Lisbon vary from a mean excessive of 82 levels Fahrenheit in July to a mean low of 47 levels Fahrenheit in January, which compares favorably to the sweltering warmth and piles of snow typical in Washington, D.C.
In Lisbon, we hardly ever use an air conditioner in the summertime. The thick stone of our condominium partitions assist reasonable temperature indoors. And we by no means hassle with hats or gloves within the winter.
6. Getting off the hamster wheel
Dwelling overseas has utterly modified our outlook and priorities in life. We considerably streamlined our belongings after we moved to Portugal. We now focus much more on how we spend our time.
I attempt to construct downtime into my day and spend numerous time in nature. A few of my happiest moments are when I’m strolling alongside the seashore at Guincho Seaside or mountain climbing via eucalyptus forests within the hills of Sintra and Colares.
I additionally take each alternative to journey with my household. Backpacking via Europe is our daughter’s favourite factor about residing in Portugal. She treasures each second, whether or not she’s attending a math competitors in Geneva or taking a household drive to Seville for the weekend.
Alex Trias is a retired legal professional. He and his spouse and daughter have been residing in Portugal since 2015. He’s the writer of the “Funding Pancake” sequence on SeekingAlpha.com and has revealed practically 500 articles about tax planning, investing, early retirement, and the place to seek out the very best meals in Lisbon.
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